This article is from the Australian Property Journal archive
AMP Capital Diversified Property Fund (ADPF) has offloaded the 140 St Georges Terrace office tower in the Perth CBD, just as shareholders voted in favour of merging the fund with Dexus Wholesale Property Fund to create a powerful $15 billion property player.
Investors in the $5 billion ADPF voted with a 93% majority yesterday in approving the merger proposal that was put forward by Dexus last year as AMP itself faced financial, governance and cultural concerns, and AMP Capital faced the task of meeting $2.2 billion of redemption requests from investors in ADPF.
AMP Capital’s parent, AMP Limited had been hoping to secure a $28 billion sale of AMP Capital to Ares Management, but the agreement appears to have fallen through. AMP Capital is now set to be spun out and listed on the ASX.
The ADPF redemption requests means more major assets like 140 St Georges Terrace will be released to the market. Recently sold off was an industrial business park on Sydney’s north shore for $71 million, following on from the sale of an office park in Macquarie Park for $289 million.
At the same time, Primewest has formed a joint venture with a fund advised by BlackRock Real Assets to acquire 140 St Georges Terrace.
Perched on the corner of William Street, the 30,000 sqm A-grade office tower at the centre of the Perth CBD. AMP Capital has been shopping the tower around for some months with 93% occupancy and a low weighted average lease expiry of 2.8 years.
It has reportedly sold for $260 million.
AMP Capital has owned the site since 1910 and developed the tower in 1975.
For Primewest, it is the first deal announced by the Perth-based group since its own proposed $600 million tie-up with Centuria Capital.
Primewest’s executive chairman, John Bond said the joint venture would immediately aim to further enhance 140 St Georges Terrace as the city’s “premier A-grade office address with a new strategic management and leasing campaign”.
“A significant amount has been spent on capital upgrades in recent years and we see further value creation opportunities for the asset given our on the ground team, pro-active management approach and in-depth Perth market knowledge.”
“This will be further enhanced by BlackRock’s significant global reach, experience and vision.”
Perth saw negative net absorption of 2,600 sqm in the CBD during the March quarter as its vacancy rate rose to 20.2%.
Singapore’s sovereign wealth fund GIC took a 25% interest in the future Chevron headquarters on the Swan River earlier this year in a deal believed to have come in at about $220 million.
Last month, Singapore’s Stamford Land Corporation wrapped up the sale of a vacant Perth office building for $67.8 million – far below the $140 price tag it was seeking 11 years ago – while Blackstone quietly offloaded a 10-storey Perth office building for just over $18 million.
Primewest will provide project services, property management and leasing services to the BlackRock joint venture, and provide a co-investment stake “consistent with other institutional real estate mandates”.
Settlement is anticipated for late June.
Primewest’s expected merger with Centuria is set to create a $15.5 billion platform, with a market capitalisation of circa $2.2 billion.
Primewest has just spent about $40 million adding vineyard and orchard assets in Victoria and South Australia to its agricultural fund, for which is has been eyeing off an ASX listing. It last year acquired Vitalharvest’s external manager with a view to a float for the trust, but that is now the subject of a bidding war between Macquarie and Roc Partners.
